The US property and casualty sector has declared its first full-year underwriting profit since 1978, according...
The US property and casualty sector has declared its first full-year underwriting profit since 1978, according to AM Best.
The ratings agency said strong pricing and restrictive policy terms and conditions had helped the sector to post underwriting profits of $6.3bn (£3.3bn) and a combined ratio of 97.9% last year.
The growth rate of net written premiums, however, slowed to 4.7% last year from the 9.5% registered in 2003. Best expects them to slow down further to about 1.2% in the coming year.
AM Best said: “The generally adequate pricing, prudent underwriting practices and operational efficiencies inherent in the unearned premium reserve at year-end 2004 will continue to benefit underwriting results in 2005, as this premium is earned and losses incurred are held at bay by stringent terms and conditions."
The ratings agency added: “Insurers will need to continue their prudent underwriting practices as rates soften.”